For years, Reddit seemed like the Peter Pan of social media startups. Industry observers and the media—Fast Company included—wondered if Reddit could ever really grow into a profitable business, despite being one of the most popular sites on the internet. Reddit had long eschewed a more traditional ad-supported model, in part because attracting advertisers without alienating its devoted user base would require a delicate balance. In 2014, Reddit started making a concerted effort to monetize, but its reputation as a locus of hate speech and white nationalism still concerned advertisers.
Just three years into her tenure as Reddit’s chief operating officer, however, Jen Wong has scaled its ad revenue to well over $100 million, which it crossed in 2019 for the first time. (In December, Wong said revenue in 2020 was anticipated to increase by 70%.) Like other ad-supported businesses, Reddit took a hit during the pandemic. But Wong says its ad revenue has already bounced back, with a 90% increase year over year in the last quarter of 2020. “I think we set ourselves up really well for this,” Wong says, citing investments in its engineering team and advertising channels. “We are actually beating our plan.”
In recent years, Reddit has also reversed its stance on content moderation and barred thousands of subreddits, including r/The_Donald, the platform’s largest forum for Trump supporters. Though Reddit’s approach to moderation may still be imperfect, Wong says advertisers aren’t nearly as concerned as they once were about ad placement next to objectionable content. “We don’t really run into that conversation much anymore,” Wong says. “We’ve invested a lot in education and features that give advertisers comfort and control.”
It may also help that the pandemic amplified the power of Reddit’s most ardent communities. “During COVID, a lot of people came to Reddit for community and belonging,” Wong says. “People were isolated. They came first for information on COVID, and, like me, ended up spending a lot of time on gardening and baking and some home renovation.” Reddit’s livestreaming service also gained traction during the pandemic, according to Wong, and the company acquired TikTok competitor Dubsmash.
In late 2020, Reddit disclosed audience metrics for the first time, sharing that 52 million people flocked to the platform on a daily basis, an increase of 44% year over year. What happened soon after only cemented Reddit’s clout: The now-infamous Reddit forum r/WallStreetBets inflated the stock price of video-game retailer GameStop, outwitting—and nearly bankrupting—hedge funds that had bet against the stock. “That actually happens quite a bit on Reddit within specific communities,” Wong says. “Maybe not at that scale, but it truly happens all the time. People get together [and] raise $100,000 for charity; they’re sending masks to essential workers whose faces have scarring.”
Under Wong’s watch, Reddit is indeed growing up. On the heels of the GameStop incident, Reddit’s valuation doubled to $6 billion after a Series E funding round of more than $367 million. (The company is reportedly looking to raise $500 million in total.) By the end of the year, Reddit plans to nearly double its headcount to about 1,400 employees, along with expanding internationally and investing in non-English-language content. “Believe it or not, half of Reddit’s audience comes from outside of the U.S., but it’s all against English content,” Wong says. “So it’s an incredible opportunity for us to have localized communities in local languages, with local context [and] local moderators.” With the recent appointment of its first chief financial officer, Reddit may also be eyeing an IPO soon.
“We take a very long view on Reddit,” Wong says. “We’ve been around for 15 years. I am confident we’ll be around for the next 15 years in an even bigger, more influential way.”
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